By Farid Farid

Homeowners will have an extra pep in their step as figures show Australia’s property market returning to record highs.

Values increased 0.4 per cent over March after the Reserve Bank cut interest rates for the first time in four years.

The lift in CoreLogic’s national Home Value Index was broadly based with rises in every capital city except Hobart, along with all the rest-of-state regions.

“Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values,” CoreLogic research director Tim Lawless said on Tuesday.

The rate cut’s helpful nudge on borrowing capacity and mortgage serviceability also likely helped push the average Australian home to $820,300.

But Mr Lawless said the bump – the second consecutive monthly rise after prices slid 0.5 per cent over summer – might be short-lived “in the face of affordability constraints”.

Interest rates are still well above historical averages and price-to-income ratios remain near record highs.

The value of owning a home in Sydney and Melbourne has risen in the last two months but remain below their record highs.

The median home value in Sydney was the highest of all capitals, sitting at $1,104,000 in March.

Canberra had the biggest monthly increase in home prices among the capitals, rising 0.54 per cent month-on-month in March where the average price of a home is $834,000. It is now the third most expensive city behind Sydney and Brisbane.

Melbourne, where the average home costs $781,000, sits behind Adelaide at fifth on the table.